Apr 15, 2022 | Business Law
Partnerships involve two or more people who are in business together and share ownership of the assets and liabilities of the business. Partnerships can come to an end for many reasons, for example:
- Disputes of profit share;
- Complications in the day to day control of the business; and
- Disagreement in the direction of the business and financial circumstances.
If you are in a partnership, it’s most likely you signed a partnership agreement with your partner(s). Conversely, if there is no partnership agreement, the terms and conditions of your partnership will be determined by the state legislation. We can assist with identifying the legal requirements in your state.
Different ways to dissolve a partnership
A partnership can be dissolved when:
- An agreement between yourself and all other partners have been reached;
- One partner gives written notice to the other partners;
- The life of the partnership, according to the partnership agreement, has expired;
- Any partner dies or becomes bankrupt;
- A court orders that the partnership ends; or
- It becomes illegal (e.g. if one partner cannot legally own the business).
Things to consider when dissolving a partnership
The primary question is whether the business will still remain operational. If so, you need to consider what the new structure of the business will be. For example, it could be a sole trader or a company. You will also need to think about registering a new ABN, registering for GST, as well as other considerations.
You also need to think about whether any partners are selling their interests. If they are, do they have any Capital Gains Tax to pay? If you are acquiring the remaining shares of another partner, who will pay the transfer duty?
Administrative factors
There are also administrative factors to consider. Think about whether the partnership books, final tax return and BAS statements have been completed and filed. Tax obligations are important and should be dealt with appropriately so that you avoid issues in the future. Are all of the bank accounts for the partnership closed?
Likewise, are there any outstanding personal or business loans that may be affected? You should consider insurance policies and ongoing contracts with other people, organisations and authorities. These need to be cancelled or transferred into the new name.
Employee obligations
Employee obligations apply if your partnership had employees. Most often these are based on your employee contracts. If you need to terminate staff or make them redundant, you may need to provide them with payment in lieu of notice. The age of the employee and how long they have worked for you will determine this.
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Legal advice for dissolving a partnership
Dissolving a partnership is a complex process. Therefore we recommend you seek legal advice. Our experienced lawyers can take you through the entire process. We will explore your options with you and ensure you have met all your legal obligations. Please contact Etheringtons Solicitors if you have any questions by using the contact form or calling us on (02) 9963 9800.
Apr 8, 2022 | Business Law, Employment Law
In this article, we identify the liabilities involved in the voluntary assumption of risk and how to avoid breaching duty of care.
In March 2010, a security guard sued his employer and the owner of Lidcombe Power Centre, for PTSD resulting from an intruder threatening his life. This case, Capar v SPG Investments Pty Ltd t/a Lidcombe Power Centre (2020) (‘Capar’), sheds light on how far an employer’s duty of care extends when an employee voluntarily assumes risk of injury.
The Capar case
The plaintiff was employed as a security guard for Lidcombe Power Centre. Whilst on duty surveying the CCTV footage, he detected an intruder entering the premises. As the plaintiff left the control room to investigate, he came upon the intruder who wielded an axe and threatened to kill him. The security guard fled to the control room for safety and called the police; who arrived shortly and apprehended the intruder. The guard suffered from PTSD as a result of the incident and initiated proceedings in negligence against the owner of the shopping centre, the security company that was paid to provide security for the premises, and his own employers (the sub-contractors of the security company).
Injured persons and “obvious risks”
The plaintiff’s negligence claims were initially dismissed by the NSW Supreme Court.
In accordance with the Civil Liability Act 2002 pt 1A div 4, the Court ruled that the security guard was aware of the “obvious risk” of mental or physical harm when he chose to leave the control room and confront the intruder.
In negligence proceedings, the injured person is ‘presumed to have been aware of the risk of harm if it was an obvious risk’. This means that the injured person is assumed to be conscious of risk ‘even if the person is not aware of the precise nature, extent or manner of occurrence of the risk’.
Voluntary assumption of risk and duty of care
The Civil Liability Act 2002 states that ‘a person (the defendant) does not owe a duty of care to another person (the plaintiff) to warn of an obvious risk to the plaintiff’.
In the Capar case, the security guard’s contract did not specify that he was obligated to confront the intruder. Owing to his voluntary assumption of an obvious risk, his employer’s duty of care was found not to extend to the actions which caused PTSD.
According to the Civil Liability Act 2002 pt 1A div 2, a person is negligent in taking precautions against a risk of harm if the risk was foreseeable, not insignificant, and if a reasonable person in the injured person’s position would have taken appropriate precautions.
Owing to these conditions, neither the occupier of the premises, the contractors nor the security guard’s employers, were made liable for negligence.
How do I avoid breaching duty of care?
There are a number of steps that can be taken to help protect your business from risks of liability in negligence:
- Ensure all staff understand their duties and perform them correctly. Have a clear written guide because if staff are unclear on their responsibilities, the likelihood of risk and personal harm may increase.
- Implement security measures on your premises that reduce the risk of liability caused by the actions of trespassers.
- Communicate a clear plan to all employees in case of an invasion. In the case of an invasion, staff should not approach or confront an intruder. They should retreat to safety and contact the police immediately.
- If you are employing security personnel, have clear and explicit discussions on the extent of their role and the potential risks that may arise.
If you would like to learn more about how breaches to duty of care may affect your personal or professional life, please see our blog for more information.
How Etheringtons Solicitors can help
A solicitor at Etheringtons Solicitors can provide clarification of the relevant law and its relation to your individual circumstances. If you need further advice or assistance with employment law or negligence matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.
Apr 7, 2022 | Business Law
A trade mark that distinguishes one trader’s goods from another is a valuable asset, however a recent Federal Court case concerning craft beer has demonstrated that registered trade marks are not always protected from cancellation in a trade mark dispute.
In the case of Urban Alley Brewery Pty Ltd v La Siréne Pty Ltd [2020] FCAFC 186, Urban Alley Brewery’s appeal was dismissed and their trade mark “Urban Ale” was cancelled under section 88(1)(a) of the Trade Marks Act 1995 (Cth). This was an important case which determined that a trade mark registration must be cancelled or rejected if it is deceptively similar to another registered trade mark.
Facts
- Urban Alley was a craft brewery in Melbourne which produced a beer product called “Urban Ale”.
- La Siréne also operated as a craft brewery in Melbourne and produced a beer product under a similar name “Urban Pale”.
- La Siréne first sought orders to cancel the Urban Alley’s registered trade mark under the Trade Marks Act 1995 (Cth) s 88(1)(a).
Significance of the Case
This case demonstrated the importance of adopting a trade mark which is sufficiently distinctive from other existing trade marks and ahead of prevailing trends.
A trade mark must be capable of distinguishing an applicant’s goods or services. It was found that Urban Ale was not “inherently adapted” to be capable of distinguishing its beers from those of other producers. This decision was based on evidence that the term “urban” was commonly associated within the industry with beer products and breweries.
The court considered the following factors:
- The term “urban” is not significant regarding the beer style or flavour, and has been used by numerous Australian businesses, including in La Siréne’s “urban pale” without improper motive. Instead it is used to describe the location of the brewery, as used by many other traders and journalists.
- The terms “urban” and “ale” were descriptive of the goods (beer) and should be interpreted with their common meaning.
- Urban Alley could not produce sufficient evidence that they had established a reputation based on the “urban ale” trade mark.
Therefore, the key terms of Urban Alley’s trade mark had become descriptive as a result of prevailing trends, causing Urban Alley’s trade mark to be deemed invalid for lack of distinctiveness and deceptive similarity.
The Test for Deceptive Similarity
The relevant test for deceptive similarity is to compare a trade mark and the recollected impression retained of another previously registered trade mark. A side by side comparison of trade marks may not convey the same meaning or idea, however, they may when imperfectly recalled under this test. Furthermore, the trademark must be viewed in its entirety, unlike the substantially identical test which requires the examination of individual trade mark elements.
Etheringtons Solicitors can assist you with enforcing your trade mark
Etheringtons Solicitors can advise you throughout the development and adoption of your trade mark to ensure that it is distinguishable from other goods and services and to avoid future trade mark disputes.
We can assist you with registering a trade mark in Australia and advise on whether your trade mark includes any descriptive qualities which could affect its validity. We may advise you consider securing other versions of trade marks which have the potential to cause a challenge risk.
If you need further advice or assistance regarding trademarks or other intellectual property matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.
Apr 4, 2022 | Business Law, Intellectual Property
Registering a trademark confers far more benefits than registering a business name, company name or domain name. Marketing is an important business tool, and a registered trade mark is crucial in allowing you to protect any value or credibility which you have built on your brand.
What is a trade mark?
A trade mark identifies a product or service, distinguishing it from the goods or services of other entities. A registered trade mark protects any branding element within a business including letters, numbers, words, phrases, sounds, smells, shapes, logos, pictures and aspects of packaging. Registration alone of a business name, company name or domain name does not offer that level of protection.
Registering a trade mark allows the owner of the trade mark to commence legal action to stop others using it. Trade marks can be used to help build market position and stop others from imitating your brand. The registration of a trade mark is effective for 10 years and can be renewed for further 10 year periods thereafter.
Registration of a trade mark covers the entire Commonwealth of Australia. For worldwide protection, an application can be filed with each country in which the trade mark will be used, or a single international application can be filed through IP Australia nominating the countries in which protection is required.
Applying for a trade mark
Trade marks are registered in specific classes relevant to the description of the goods or services for which the mark will protect. The application for registration must nominate one or more classes of goods or services for which the mark is intended to be used and associated. If the mark applies to more than one class, the wider the protection that mark has once the trade mark is registered.
Before making an application to register your trade mark, the following should be considered:
- Identify the relevant class of goods or services for which the mark will apply. Schedule 1 of the Trade Marks Regulations 1995 prescribes the available classes and describes the types of goods of services specific to each class. A search should be carried out before applying to register a trade mark to check that a similar trade mark is not already registered in that class. An application to register your trade mark will be rejected if there is an identical or similar trade mark already registered which covers similar goods or services.
- Only minor changes can be made to a trade mark once an application has been filed and published.
- A trade mark registration is for the goods and services you actually trade in or intend to trade in in the near future. Once an application is filed and registered, goods and services cannot be added. Therefore, you should clearly define the marketplace you trade in to ensure the best possible protection.
- Your trade mark must be something that is capable of distinguishing your goods and services. Exclusive rights are difficult to register over everyday language, names and descriptions of products and services
Once you are happy with your trade mark, you can apply to register it through the IP Australia website. You can also request an assessment of the likelihood of your trade mark achieving registration through TM Headstart.
The cost of applying for a trade mark will vary depending on the scope of the application. Generally, the minimum cost to apply is $120 for each class of goods and services. In Australia there are 45 different classes of goods and services and each additional class costs an extra $300.
The application process
Once your trade mark is accepted, it will be advertised in the Australian Official Journal of Trade Marks and the application is open to opposition for a period of 3 months (which can be extended by an opponent for a further 3 month period where there has been an error or omission).
If your application is not challenged, your trade mark will be registered once the registration fee is paid (payment must be made within 6 months from the date acceptance is advertised or your application will lapse).The registration of a trade mark in Australia takes at least 7 months after an application is filed.
Seek legal advice
When applying for an Australian trade mark it is important to ensure your trade mark description and classes accurately reflect the goods or services for which you intend to use your trade mark. By investing in protecting your brand today, you can avoid the costly and uncertain exercise of preventing unauthorised use of your unregistered trade mark in the future. We are experienced in intellectual property matters and can work with you to ensure your trade mark is registered in the appropriate class or classes, and to respond to any opposition to the proposed registration. We are also able to assist with trade mark and copyright disputes.
If you or someone you know wants more information or needs help or advice regarding trade marks, please contact us on (02) 9963 9800 or via our contact form.
Oct 1, 2020 | Business Law, COVID-19
Disclaimer: The directives in this article relating to the COVID-19 pandemic may no longer be in force. Please use caution if you are citing legislative material from this article as laws are subject to change. We recommend that you seek the most up-to-date law.
A bankruptcy notice is essentially a demand for the payment of money served by a creditor (a person who is owed money) onto a debtor (a person who owes money). They are generally served to enforce court judgements worth $5,000 or more against a debtor.
What Do I Do if I Have Received a Bankruptcy Notice?
If you have received a bankruptcy notice, you need to either comply or apply to have it set aside. Whilst you would normally have 21 days in which to do one or the other, this has been extended to 6 months due to complications related to Covid-19. You can either pay the amount owed in full or reach an agreement with the creditor (preferably in writing) to pay the amount owed in instalments.
However, if you want to apply to the court to have the bankruptcy notice set aside, you must also act within the time stated in the notice. If you fail to act in this time, you will have committed an ‘act of bankruptcy’. This will allow the creditor to lodge a petition to apply for a sequestration order. This in turn will make you bankrupt.
Applying to set aside a bankruptcy notice
You can apply to the Federal Court or Federal Circuit Court to set aside the bankruptcy notice. You can also apply to extend the time for compliance with the notice. These options are available if you can argue one of the following:
- There is a defect in the bankruptcy notice. For example, the name on the notice is wrong, there was no time limit for compliance with the notice, the judgement or order was worth less than $5,000 or the notice was not served properly.
- The debt does not exist, such as if you have already paid for it.
- You have a claim against the creditor, equal to or greater than the amount claimed in the bankruptcy notice. The bankruptcy notice is an abuse of process. This means that it has an improper purpose or is providing unfair pressure on the debtor to pay the debt.
To set aside a notice you need to fill out and file Application Form B2, an affidavit and the bankruptcy notice at the Federal Court. You will need to pay a filing fee. Then you need to serve a copy of the application and supporting affidavit that have been stamped by the court on each respondent to the application. This must happen personally within 3 business days of the application being filed.
Legal Advice
Bankruptcy notices can be complex to deal with, and the Bankruptcy Act 1966 is a complex piece of legislation. It is recommended you seek legal advice before acting.
To find out more, please do not hesitate to contact us.
